McDonald's: Strong Dollar Might Cut Profit

Updated from 10:37 a.m. EDT

McDonald's (MCD) said Monday that global same-store sales rose 1.4% last month, but that foreign currency rates are expected to hurt first-quarter revenue and earnings.

The fast-food chain said that if foreign currency rates remain at current levels, with the dollar strong relative to its competitors, the translation may decrease first-quarter revenue by at least $600 million and earnings by 7 cents to 9 cents a share.

"In addition, as previously stated, commodity cost pressures are expected to have a greater impact during the first half of the year," the company said in a statement.

McDonald's also said that first-quarter results will include an after-tax, nonoperating gain of 3 cents to 4 cents a share stemming from the sale of the company's minority interest in RedBox Automated Retail, a chain of self-service DVD rental vending machines. McDonald's said it has tentative plans to post first-quarter results on April 22.

"We remain confident in the fundamental strength of the McDonald's business," CEO Jim Skinner said in a statement. "We have the right strategies in place to grow the business for the long-term and we have the operating experience to manage through the current environment."

The news came alongside McDonald's same-store sales report for February, which showed that the company enjoyed strong comparable sales results despite harsh economic headwinds. The company said sales rose 1.4% last month, which reflects an extra day in February 2008 because of leap year. Excluding that difference, same-store sales rose about 5.4%.